January 21, 1979  .for too many Americans, the dream home has turned into a nightmare. You know as well as I do that as families move into their own little Garden of Eden, more and more are finding the apple full of worms. As a result, some homebuyers believe they are being bilked for thousands of dollars, and they are expressing not only anguish but outrage. Shoddy building practices can be concealed from many purchasers who cannot be expected to have the technical expertise to evaluate the structural soundness of a home or the quality of electrical, plumbing, or air conditioning systems The patience of the American consumer is rapidly running out. Consumers are demanding more protection from the government, not LESS. The consumer movement is no longer made up of small bands of activists with no troops standing behind them; the consumer movement is now part of our culture  it embraces every one of us. And it will not be denied over an issue so fundamental as decent housing

CATO INSTITUTE - DOWNSIZING THE FEDERAL GOVERNMENTOverview The $65 billion Department of Housing and Urban Development has been plagued by mismanagement and scandal in recent decades. Numerous HUD secretaries have used their power to enrich themselves or to confer special benefits on people with political and financial connections. This essay looks at HUD mismanagement during the tenures of four HUD secretaries under three recent presidents:

HUD's Broken System and DeregulationHUD - No Crack Down on Fraud in Federal Housing ProgramsWho is Guarding the HUD GuardsAn Insight investigation into the inner workings of the HUD OIG office has revealed a complex web of alleged abuses of investigative power. Waste and mismanagement of monies appropriated to crack down on the hundreds of millions of dollars' worth of fraud in federal housing programs is common, and allegations of disregard for civil-service hiring rules and a penchant for political cronyism appear to reach into the highest ranks of the investigations office. Scores of documents examined by this magazine, made available by congressional critics of HUD, suggest that within the very office meant to audit, investigate and evaluate the spending by HUD of billions in taxpayer dollars are senior officials who have engaged in chronic wrongdoing. _____________________________________

A Classic of HUD's Deregulation
Pulitzer Prize Award The Seattle Times Investigative Report: The Tulalips: Despite $92,000 income, couple got federal aid to build 5,300-square-foot houseAt nearly 5,300 square feet, it's three times the size of the average American home.
Read the investigative report ...this secluded manor was built with tax dollars intended to help needy Native Americans... The money came from a U.S. Department of Housing and Urban Development program to build low-cost homes for low-income tribal members... This enormous house was one of 18 built for Tulalip-reservation residents under the HUD program. Most of them are large enough to blend into any upscale suburban subdivision. Although none of the others is as big as the Gobin-Alva house, several are over 2,000 square feet and as big as 3,000 square feet, and three have three-car garages...If they had had it built, like any other middle-income couple, they would have paid upward of $400,000, not including the land, according to real-estate and construction experts. The inspector general is expected to set the actual cost of the house at $260,000, Leslie said. The deal with Leslie ensures they won't pay more than $214,000 - 18 percent under cost and half the market rate. Read the Seattle Times Investigative Report...

In 1993 U. S. Department of Housing and Urban Development Discontinued Approval of All New Homes and Subdivisions by Adopting the Developer and BuilderCertification Procedure, based on builders promises to comply with HUD Standards

Termination of Subdivision Processing and New Builder CertificationSeptember 09, 1993OFFICE OF THE ASSISTANT SECRETARY FOR HOUSINGMortgagee Letter 93-27HUD will no longer approve new subdivisions under the Developer Certification Procedure or the Local Area Certification Procedure or perform subdivision analysis as set forth in HUD Handbook 4135.1 (REV-2) after September 1, 1993. The new Builder Certification procedure and the Improved Area procedure (which has been in place for several years) will be the only methods by which the Department will grant mortgage insurance on individual properties in new subdivisions that were not approved by HUD on
or before September 1, 1993.http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/93-27ml.txt

HUD's Direct Endorsement Program mortgagee approval.Elimination of Type 2 Supervised Mortgagees The Department has eliminated "Type 2" Supervised mortgagees as a category of approved mortgagee. Under the prior regulations a "Type 2" Supervised mortgagee was typically a subsidiary or affiliate of a bank or savings and loan association, or an institution regulated solely by State officials. A mortgagee presently approved by the Department as a "Type 2" Supervised mortgagee will be automatically converted to a Non-supervised mortgagee status on January 11, 1993(unless the mortgagee requests HUD approval for Loan Correspondent status).http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/93-2ml.txt

In 1993 HUD Established  Lenders Select their own Appraisers

Procedures for Lenders to select their own AppraisersNovember 7, 1994OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING Mortgagee Letter 94-54That Section allows Direct Endorsement (DE) lenders to select their own appraisers in addition to the current options of using a staff appraiser employed by the DE lender itself or a fee appraiser assigned by HUD from one of its fee panels.

HUD is leaving it up to lenders to decide whether error and omissions insurance coverage should be required from appraisers that they select.

Although HUD strongly encourages appraisers to attend a training session sponsored by HUD or a local trade group, we are not requiring that appraisers attend any such session prior to applying for placement on the Lender Selection Roster. Instead, the Department will rely upon lenders to assure that only knowledgeable appraisers are chosen to perform HUD appraisals and will rely on the integrity of each individual appraiser.http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/94-54ml.txt

________________________________________________________________Nearly a Billion Wasted at HUDUncovering waste, fraud and abuse

HUD Fraud: $240,000Nearly a Billion Wasted at HUD Dallas/St. Louis HUD Waste: $4.7 millionNoncompetitive HUD Grants: $6 millionAtlanta HUD Waste: $7 millionPR Housing Authority Waste: $25.9 millionHUD subsidy overpayments: $935 million
According to a HUD inspector general report, in Atlanta HUD failed to put vacant homes back on the market and let half of them deteriorate into bad condition. In other words, they wasted $7 million in taxes while making neighborhoods worse.

Convicted State Senator gets HUD Funds?'No Agent' makes no dealKingston was a state senator when he was caught illegally buying HUD properties and renting them out. The government claimed Kingston did not make payments on the properties causing HUD, using taxpayer money, to pay off the mortgages when the properties went into foreclosure. Leo Kingston was found guilty of fraud and sentenced to federal prison and so was his wife Paulette. She is the one now seen in the commercials for 1-800-No-Agent or RAK properties. NewsChannel 4 learned that as a result of his fraud conviction Kingstons name was on a government list barring him from being a HUD funded landlord for low income properties.Read more...

Housing Corruption Protest in Dade County
HOMES FOR THE LOW-INCOME WERE SNAPPED UP BY OTHER BUYERS WHO FLIPPED THEM FOR A PROFITIn a county seized by one of the most dramatic affordable housing shortages in the nation, developers entrusted with government land and money to build homes for the poor have sold instead to real estate investors, wealthy buyers or families who turned quick profits. Read more...

HUD's $20M Mirasol FiascoExpress News Special - U.S. Rep. Charlie Gonzalez pushes for answers
American dream now homeowners' nightmareThe empty houses in Mirasol, a West Side project paid for with federal tax dollars and owned by the San Antonio Housing Authority, sit in various states of deterioration, preyed on by vandals and thieves. Read more...

Sep 6 2002 Editorial: Housing debacle warrants scrutiny San Antonio Express-News The contractor for the project is Magi Realty. Its subcontractor is major homebuilder that has said it will take care of the problems. .... But they were supposed to replace aging, dilapidated public housing. Given the state of things less than a year after their construction, it won't take long for the new homes to achieve that aging and dilapidated look. Aug 30 2002 SAHA slates hearing on Mirasol Homes By Ron Wilson San Antonio Express-News Problems at the $50 million single-family-homes development were detailed Aug. 12 in a San Antonio Express-News story [Fault found with housing project] that told of houses without back doors or windows, falling cabinets, broken doors and listing porch beams and a contaminated landfill that apparently escaped the notice of planners.